SUEZ’s report finds that while the UK’s current capacity gap, standing at 13.6 million tonnes, will fall over the next decade or so as recycling rates and energy recovery capacity increase, the UK will still be facing a capacity gap of 2.4 million tonnes by 2030 - the equivalent to the capacity of around 10 Energy-from-Waste (EfW) plants at a value of £2 billion. The full report provides a more detailed regional breakdown and analysis of the residual waste gap.

The report states that, despite releasing a similar report in 2014 assessing the UK’s residual waste treatment infrastructure, SUEZ felt compelled to update its forecast in light of an accelerated rate of closures of landfill sites in the UK, with Brexit altering the market dynamics for exported refuse derived fuel (RDF) and solid recovered fuel (SRF) as well as causing a fall in the Pound, and the need to make the business case for investment in waste management.

SUEZ’s analysis splits the UK into 14 trading zones with boundaries predominantly demarcated by transport and logistical considerations, with most wastes generated within these individual zones remaining within the boundaries of these zones to be treated.

The primary trading zones analysed in the report are:

The M8 corridor

The M62 corridor

The South East

Commenting on the launch of the SUEZ report, Mark Sommerfeld, policy analyst at the Renewable Energy Association said: “The report clearly highlights the extent of the waste management challenge facing the UK over the next decade. Falling levels of landfill capacity are good to see, but when combined with anticipated rising waste export costs and low levels of local authority waste infrastructure, it is clear that the UK needs fresh investment into advanced waste management systems.

“Yesterday’s results for the renewable energy CfD auction demonstrated that Advanced Conversion Technology energy from waste projects are able to deliver renewable base load capacity at a highly competitive price.

“The Government must now seriously re-think the UK’s waste management strategy and align the successful existing renewable power auctions more closely to it. Government policy needs to focus on how to incentivise delivery of the full range of waste based products that ACT technology offers. This would be a major step towards the sustainable management of the UK’s waste and would support the production of green transport fuels, chemicals, and heat.“

The M8 corridor

The M8 corridor (south of Glasgow and Edinburgh) comprises around 78 per cent of Scotland’s population, forecast to grow by 20 per cent by 2030, and produces the majority of the country’s municipal and commercial and industrial waste.

Commercial and industrial growth has been steady since the 1970s, focussing on distribution, hotels and catering, business services and finance, and government and other services, while manufacturing has shown a sharp decline.

SUEZ’s report expects municipal and construction and demolition waste arisings to continue to fall due to the Scottish government’s waste management policies, while net waste production should increase slightly due to increased commercial and industrial activity.

Scotland is currently reliant on landfill treatment to deal with its residual waste but much of that will be diverted to EfW facilities in the next few years while increased recycling will further reduce the amount of waste going to landfill. SUEZ expects the M8 corridor to lose around 68 per cent of its landfill sites by 2030, leaving around eight sites operational in the trading zone - a number predicted to be sufficient to manage waste arisings in that time.

With exports of RDF/SRF not expected to play a significant role in the prospects for the M8 corridor, SUEZ expects the zone to reach its design equilibrium for domestic thermal treatment capacity between 2027 and 2030. If higher-than-modelled recycling performance is achieved, then there is a small risk of EfW overcapacity by 2028. The number of EfW projects proposed or in development could potentially lead to an overcapacity before 2028, in the unlikely event that they are all brought to fruition.

The M62 corridor

The M62 corridor, which stretches across Northern England from the Irish Sea to the North Sea and encompassing cities such as Liverpool, Manchester and Leeds, is home to 13 million people, forecast to grow by 7 per cent by 2030.

The trading zone comprises heavy industrial activity, research and high-tech manufacturing and industrial farming and has seen Gross Value Added (GVA) grow by 20 per cent between 2004-2013, currently accounting for 10 per cent of the UK’s total GVA. The zone is the target of much investment due to the Northern Powerhouse Programme.

The zone relies on a number of EfW solutions to divert waste from landfill, and around 20 active landfill sites are expected to remain in operation by 2030, with EfW projects in development leading to EfW overcapacity between 2024 and 2027, depending on recycling rates. SUEZ’s report suggests that waste be drawn in from other areas where non-landfill residual waste treatment is lagging behind to deal with issues of overcapacity.

Exports of RDF/SRF are expected to fall due to the impacts of Brexit, which is likely to result in short- to medium-term capacity issues as these exports are significant in this trading zone.

Without policy and regulatory certainty from national government, confusion on the direction of travel on landfill, recycling, waste production and on EfW could pose political and policy risks for the zone in the future.

The South East

The South East trading zone is home to around 20 million people (30 per cent of the UK population), with this number forecast to grow by 8 per cent by 2030, with high population density compared to the rest of the UK, especially in London boroughs.

The zone accounts for around 40 per cent of UK total GVA, most of which is concentrated in the service, management and finance sectors. The zone is serviced by a number of radial roads, such as the M25, and rail routes while also boasting significant port facilities - the Port of london handles 48 million tonnes of cargo a year.

The South East currently has over 45 operating landfill sites with this number forecast to decline sharply following natural closures and the end of planning permission notices. Sites are unlikely to be closed prematurely unless RDF/SRF exports grow significantly, which they are not predicted to.

The South East does currently, however, account for 50 per cent of all UK exports of RDF/SRF and a number of new EfW plants are expected to come online within the next two to three years.

According to SUEZ’s modelling, the South East is likely to still need landfill through to 2028, and likely through to 2030, resulting in a capacity gap. Overcapacity would only occur if RDF/SRF exports grew substantially.

The great divide

The issue of residual waste capacity treatment has been the subject of heated debate over the past month. Following the release of Eunomia’s report at the start of August, stating that the UK would reach residual waste treatment overcapacity by 2020/21, with excess capacity increasing to 9.5 million tonnes by 2030/31, ESA Executive Director Jacob Hayler branded Eunomia’s report “flawed”, saying it had “been contradicted by report after report from everyone else” and risked allowing the UK to “sleepwalk” into a capacity shortfall.

Eunomia Research & Consulting has released more figures in defence of its prediction that the UK would reach an overcapacity in residual waste treatment infrastructure by 2020/21 in response to criticism the ESA.

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